Good post! I do alot of small jobs. My highest job ever was $15,000 haha peanuts compared to you. But we stay really busy knocking out 500- 2,000 jobs reguarly. Good luck to you man. Your on a different level than I am and certainly need to have alot of confidence in your company. I honestly like to play it to safe all the time. I turn down any job that gets to complicated and risky. But to each his own, good luck send us some pics if you get it.

Honestly, he has a better chance of putting himself out of business - just by not knowing his production times well enough and not considering all of the possible expenses. You take on a $400,000 job -- only to find out near the end that you should have bid $500,000 like everyone else -- that will put you out of business faster than anything.

Honestly, he has a better chance of putting himself out of business - just by not knowing his production times well enough and not considering all of the possible expenses. You take on a $400,000 job -- only to find out near the end that you should have bid $500,000 like everyone else -- that will put you out of business faster than anything.

Yea, when bidding any job you have to know every single number.
If its a $500k job and you bid $400k just to land it...................you wont be around very long. We recently turned down a job for $1.3mil , we were at $1.6 and they wanted us to drop our price and match what the other company was charging.............wasn't going to happen. $300k is a lot of money.
When doing commercial you can lose a lot of money really fast, that's the bad part about it. You are forced to work around so many contractors, some times its ok and sometimes they are all ******ed.

Ok, let's say he bids the job for $300k and it ends up being 400k. What do you do?

You end up completing the job but instead of making the $55 per man hour you were hoping to make, you make $35 per man hour. The materials are a fixed price. So that cannot give. The only thing that gives is the amount of money you make after materials (labor, profit).

In that case, in reality, you'd end up paying your workers; paying for a lot of the materials; still owing suppliers for some of the materials; making no profit on the job; some big tax bills, insurance bills, and worker's comp. bills that you wouldn't be able to pay. Then you'd be scrambling to land another job to help you recover your loss on that previous job. As you started getting funds in from the new job, you'd start paying off your late bills that were stacking up. Hopefully, you'd learn your lesson and start learning how to bid jobs correctly. But often times if you cannot get back on track quickly enough, it just ends up putting you out of business, because you're not really accounting for your full overhead and can't pay the bills.

That's probably the most typical scenario.

Another scenario is you run out of funds and cannot complete the job. The client goes against your surety bond and the bond company covers the cost to have another contractor come in and complete the job (read more here). Then your bonding company retracts your bond, black lists you, and you cannot get a bond anymore. At least not without paying exorbitant rates. So without a bond you lose the ability to bid jobs like this again and go out of business.

Another scenario is you run out of funds and cannot complete the job. The client goes against your surety bond and the bond company covers the cost to have another contractor come in and complete the job (read more here). Then your bonding company retracts your bond, black lists you, and you cannot get a bond anymore. At least not without paying exorbitant rates. So without a bond you lose the ability to bid jobs like this again and go out of business.

your forgetting another scenario (imo the most likely), he doesn't have the funds to finish and walks away. the gc hires someone else to finish the job and backcharges him the difference. gc sues him for the difference now he can owe another few hundred thousand on the job thus putting him outta biz..

your forgetting another scenario (imo the most likely), he doesn't have the funds to finish and walks away. the gc hires someone else to finish the job and backcharges him the difference. gc sues him for the difference now he can owe another few hundred thousand on the job thus putting him outta biz..

Not very likely. Any G.C. doing a job this size is going to require a surety bond. You wouldn't hire someone for a job that big without that contractor being bonded. Hence my second scenario above.